the new consumer economy: what to watch and what to do
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The New Consumer Economy: What to watch and What to do. James Russo, Nielsen. KEYS. TO. GROWTH. REACH: An increasingly economically divided consumer CONNECT: With consumer need states LEVERAGE: The redefinition of value TARGET: Economically powerful consumer segments - PowerPoint PPT PresentationTRANSCRIPT
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Title of PresentationCopyright © 2012 The Nielsen Company. Confidential and proprietary.
The New Consumer Economy:What to watch and What to do
James Russo, Nielsen
KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
INCREASINGLY ECONOMICALLY DIVIDED CONSUMERS
Source: msnbc.com; CNN Money*Supplemental Nutrition Assistance Program (SNAP)
1 in 7 Americans rely on food stamps
1 in 2 Americans own stock, mutual fund, 401K or IRA
20% of Americans earn less than $20,000 a year
20% of Americans earn less than $20,000 a year
87% of Americans earning over $75,000 own stocks
87% of Americans earning over $75,000 own stocks
RETAIL SPENDING DRIVEN BY AFFLUENT HOUSEHOLDS
Retail Spending: 2 year trend
Approximately20% of HHs earn
over $100k
Approximately20% of HHs earn
over $100k
Source: Nielsen Homescan, 52 w/e 10/1/2011 versus 10/3/2009 excludes gas-only or Rx-only trips
-9%
-1%
-3%
-8%
-1%-1%
4%
< $20K $20K - $29K $30K - $39K $40K - $49K $50K - $69K $70K - $99K $100K +
Household Income
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
US MEDIAN HOUSEHOLD INCOME ON DOWNSLIDE
Source: U.S. Census Bureau; The New York Times & USA TODAY/Sentier Research
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
YOU CAN NO LONGER AFFORD TO BE “MIDDLE OF THE ROAD”
Conventional Retailers can no longer be …conventional
They need to differentiate themselves more than ever – to get beyond price
Conventional Retailers can no longer be …conventional
They need to differentiate themselves more than ever – to get beyond price
KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
WHAT WE DID
• Selected a list of major CPG & Retail advertiser brands to include in the analysis
• Categorized ads (4000+) by creative approach: humor, narrative, sentimental, product, promotional & value
• Evaluated the “effectiveness” of each creative approach throughout the recession (from 2006 through 2011) among Adults 18+
WHEN DESIGING ADS, THE SMART MONEY IS ON: HUMOR, NARRATIVE, SENTIMENTALITY
2006 - 2007 2008 - 2009 2010 - 2011
FOCUS ON THE CONNECTION
• Marketers focused on product features and promotion/price do not resonate with viewers . . . even during tough economic times
• Consumers respond to marketing that makes a connection. Focus on creating messages that engage audiences with humor, sentimental/family themes, and relatable/engaging storylines over those that tout price/promotion/product features
KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
VALUE IS NOT JUST ABOUT PRICE, IT’S ABOUT THE BALANCE OF PRICE AND BENEFITS
Value Consumer = Price Value Consumer = Benefits/Price
All other Yogurt Greek YogurtAvg Price +107% higherUnit Sales 134%
Unit Sales -8%
Unit Sales 6% Premium Chocolate Avg Price 83% higher Unit Sales 10%
Mainstream Chocolate
Pound Sales 1% Healthy PastaAvg Price 57% higher Pound Sales 5%
Pasta Excluding Health
Unit Sales -4%
Premium CoffeeAvg Price 18% higher Unit Sales 5%
Mainstream Coffee
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
Shop
Source: Nielsen Homescan Survey – February 2012
NEARLY HALF OF CONSUMERS HAVE SHOPPED AT ALTERNATIVE VALUE FORMATS
Defined as: Thrift, 2nd hand/used goods, consignment, & pawn stores; Craigslist website; check cashing establishment
<= $49K $50K to $99K $100K+
56%
75% 72%66%
52% 46%56%Shopped In the past 3 months
Plan to shop in the next 12 months
KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
KEY TRENDS THAT WILL IMPACT BEHAVIOR
Increasingly Multicultural Older but Wiser
Declining FamiliesIncreasingly Urban Smaller Households
Stagnant Population
ETHNIC HOUSEHOLDS WILL BE THE MAJORITY BY 2050
35%
54%
Source: US Census
BUT THE OPPORTUNITY IS TODAY
HISPANICAMERICANS
12th LARGESTECONOMY
AFRICAN-AMERICAN
17th LARGESTECONOMY 27th
LARGESTECONOMY
CONNECTED BUT CONNECTED = ENGAGED
HISPANICS AFRICAN AMERICAN ASIAN AMERICANtext talk view
THE GAP
New Product
Hispanic
Ad Spending
African American
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
REACH RESONATE
HOW WE GET THERE
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
KEY TAKEAWAYS
• A successful ad is a successful ad
• Everybody responds to humorous storylines
• Prioritize universal drivers over cultural nuances
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
MULTICULTURAL DRIVERS
* Likability Index versus average Asian Ad likability* Likability Index versus average Asian Ad likability
Asian Americans like product features
46% 85%OF TOP ADS DISCUSS PRODUCT FEATURES
OF BOTTOM ADS DON'T DISCUSS FEATURES
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
MULTICULTURAL DRIVERSAfrican-Americans respond to humor
42% 96%OF TOP ADS AREHUMOROUS AND RELATABLE
OF BOTTOM ADS ARE NOT HUMOROUS OR RELATABLE
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
MULTICULTURAL DRIVERSHispanics prefer family references
41% 95%OF TOP ADSFOCUS ON THE FAMILY
OF BOTTOM ADS DON'T FOCUS ON THE FAMILY
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
41%INCREASE IN HISPANIC
MARKET SALES
TOP PERFORMING GENERAL AD RESULTING IN
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Copyright © 2012 The Nielsen Company. Confidential and proprietary.
What’s In Store: 2012
KEY TRENDS THAT WILL IMPACT BEHAVIOR
Increasingly Multicultural Older but Wiser
Declining FamiliesIncreasingly Urban Smaller Households
Stagnant Population
You need to adjust to accommodate different shopping and product preferences
It’s an age AND it’s an attitude
This Not this
Know the difference between age groups and generations
Seniors Today Seniors Tomorrow
• More traditional• Less technological savvy• Conservative values• Conservative tastes
• Requirements, conditions & ailments related to age
• Less traditional• More technological savvy• Less conservative values• Willing to experiment
• Requirements, conditions & ailments related to age
Sameneeds
DifferentPeople
PatientPatient ConsumerConsumer
KEYS GROWTH
TO
1. REACH: An increasingly economically divided consumer2. CONNECT: With consumer need states 3. LEVERAGE: The redefinition of value4. TARGET: Economically powerful consumer segments5. UNDERSTAND: New viewing habits
HOW WE CONNECT WITH CONSUMERS IS EVOLVING
USING NEW AND TRADITIONAL WAYS
3.5 Hours
3.5 Hours
74%Internet
penetration
74%Internet
penetration
DEVELOPED
DEVELOPED
21% of North
Americanshave TV’s
with internet connection
21% of North
Americanshave TV’s
with internet connection
++
Source: Nielsen Global Survey Q3 2011
CROSS PLATFORM VIEWING GAINING• Average TV viewer is
watching 6 fewer minutes per day of traditional television
• Viewing is shifting to other devices, including to tablets. (Current penetration is 15% of US homes)
• Nearly 36 million mobile phone owners in the U.S. watch video on their phones.
LEVERAGE SIMULTANEOUS USAGE
Source: Nielsen Q2 2012 Connected Devices report
44% of simultaneous
tablet+TV viewers visited
a social networking site
during the program
86% tablet owners
and 84 % of smartphone owners use their device
while watching TV
BREAKING THROUGH THE SOCIAL MEDIA AUDIENCE
SOCIAL ADS GENERATE A 55% GREATER LIFT IN RECALL
52% Opportunity to save
37% Free service or app.
36% Exclusive information
33% News of interest
26% Charitable purpose
Consumers will provide their personal information for:
59%
56%
52%
49%
49%
48%
46%
New Product Input
Product Reviews
Join Manufacturer Group
Receive/Share Recipes
Join Retailer Group
Receive Coupons
Join Loyalty group
FOR OUR INDUSTRY…WHAT ARE CONSUMERS WILLING TO DO ON SOCIAL MEDIA?
Source: 2011 Nielsen PanelViews Media Survey - Individual responses - Canada
Consumers are willing to
get more involved
TRUST IN A SOCIAL MEDIA WORLD
Completely Completely/somewhatBrand Sponsorships 7% 47%TV Ads 6% 48%Radio Ads 5% 43%Newspaper Ads 6% 46%Magazine Ads 6% 47%Ads before movies 4% 41%TV product placements 5% 41%Outdoor billboards 4% 46%
Completely Completely/somewhatBrand Sponsorships 7% 47%TV Ads 6% 48%Radio Ads 5% 43%Newspaper Ads 6% 46%Magazine Ads 6% 47%Ads before movies 4% 41%TV product placements 5% 41%Outdoor billboards 4% 46%
TraditionalMedia
Completely Completely/somewhatBranded websites 9% 57%Emails I signed up for 6% 50%Ads in search engine results 5% 40%Online video ads 4% 36%Online banner ads 4% 33%Ads on social networks 4% 36%Txt ads on mobile phones 3% 29% Display Ads on mobile devices 4% 33%
Completely Completely/somewhatBranded websites 9% 57%Emails I signed up for 6% 50%Ads in search engine results 5% 40%Online video ads 4% 36%Online banner ads 4% 33%Ads on social networks 4% 36%Txt ads on mobile phones 3% 29% Display Ads on mobile devices 4% 33%
NewMedia
Completely Completely/somewhatRecommendations from people you know 28% 91%Consumer Opinions posted online 9% 70%Editorial Content (Newspapers) 7% 59%
Completely Completely/somewhatRecommendations from people you know 28% 91%Consumer Opinions posted online 9% 70%Editorial Content (Newspapers) 7% 59%
Friends&
Family
Source: Nielsen Global Online Consumer Confidence Survey 3Q2011
Economic Outlook
WHAT’SNEXT?
24% 22%
0%
10%
20%
30%
40%
50%
1Q09
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
Source: NGCCI
MostOptimistic
MostOptimistic
U.S CONSUMER IS CAUTIOUSLY OPTIMISTIC ABOUT THE FUTURE
DO YOU THINK YOUR COUNTRY WILL BE OUT OF A RECESSION IN THE NEXT 12 MONTHS?
% SAYING YES
Source: Nielsen Global Omnibus Consumer Confidence Survey 1Q2012
LOOKING FORWARD, COPING MECHANISMS REMAIN CONSISTENTWHEN ECONOMIC CONDITIONS DO IMPROVE, WHAT
DO YOU EXPECT YOU WILL CONTINUE TO DO……
Save on gas 51%
Reduce take-out 35%
Less on apparel 31%
OOH Entertainment 29%
Save on groceries 28%Source: Nielsen Global Omnibus Consumer Confidence Survey 2Q2012
THE CONSUMER IS IN CONTROL
ConsumerConsumerBrandsBrands RetailersRetailers
SUCCESS RELIES ON EVEN GREATER COLLARBORATION
Collaboration
Trust
Loyalty
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Copyright © 2010 The Nielsen Company. Confidential and proprietary.
Title of PresentationCopyright © 2012 The Nielsen Company. Confidential and proprietary.
The New Consumer Economy:What to watch and What to do
James Russo, Nielsen